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U.S. Immigrants Fuel Local Economies in Their Home Countries

(Washington File) Money sent home by immigrants in the United States reduces poverty in developing countries and supplements government foreign aid, according to reports.

Approximately 34 million foreign-born people live in the United States; they represent 12 percent of the population the largest share since the 1920s. According to Manuel Orozco of the research group Inter-American Dialogue, 70 percent of these foreign-born people send money home.

Estimates of the value of such remittances vary, but even the lowest figure for 2004 -- $30 billion, reported by the Bureau of Economic Analysis (BEA) -- is an amount 1.5 times larger than U.S. government foreign aid for 2004. (See related article.)

The Hudson Institute estimates $47 billion in remittances and says its figure is higher because it includes person-to-person transfers in addition to bank and wire transfers. The Inter-American Dialogue puts the amount at $60 billion.

Whatever the total, the trend is not in debate: experts agree that remittances have surged in recent years. BEA reports a more than doubling in the dollar amount of remittances from the United States from 1994 to 2004.

Some migrants in the United States organize hometown associations, which collect money for large projects. The groups hold parties at which guests donate toward the purchase of an ambulance or the building of a school.

In the early 1980s in California, five hometown associations of immigrants from Zacateca, Mexico, formed the Zacatecan Federation. By 2000, the group was sending $1 million a year home and had convinced municipal, state and federal governments in Mexico to match its donations.

If you go to Zacateca, you see poor communities completely converted you see hospitals, clinics, roads and water wells, said Efrain Jimenez, vice president of the federation.

The project closest to Jimenezs heart was an early campaign to raise $1,000 for a hose to bring water from a reservoir to a village. When poor communities dont have potable water, you see old ladies going to the river to bring water. In drought season, at three in the morning, they go and wait for the small amount of water they can get from a well, he said.

The countries receiving the largest shares of remittance dollars sent from the United States are India, Mexico, the Philippines, Guatemala and El Salvador. China, Vietnam, Colombia and Brazil also receive significant amounts.

According to Sumitra Chowdhury, an economic analyst at Indias Embassy in Washington, in 2005 India received $32 billion in remittances from its citizens living all over the world. There is no breakdown for how much of that came from the United States, but the highest number of Indians abroad are in the USA, she said.